Bengaluru, June 15: The political debate over fund allocation between the central and Karnataka governments continues. Union Finance Minister Nirmala Sitharaman presented data on central funding to Karnataka, countering claims made by the Congress-led state government.
Sitharaman stated that there is a prevalent narrative in Karnataka suggesting that the state contributes significantly to the central revenue but does not receive adequate funds in return. She asserted that this claim is not supported by facts.
According to the Finance Minister, Karnataka has received approximately ₹4 lakh crore from 2014 to 2026 through tax distribution as per the Finance Commission’s recommendations. In contrast, during the previous UPA regime, the state received only ₹82,000 crore over a decade. This current amount is nearly five times greater.
She also noted that Karnataka has received ₹2.71 lakh crore in grants and assistance from 2014 to 2026, while the UPA government provided around ₹60,000 crore during its ten years in power.
Sitharaman explained that after the COVID-19 pandemic, Prime Minister Narendra Modi recognized that the country’s economy could not progress rapidly without strengthening the states’ finances. In this context, the central government initiated a 50-year interest-free loan scheme for all states.
Under this scheme, Karnataka has received over ₹18,000 crore in assistance since 2021. This funding is not bound by any Finance Commission constraints but aims to promote state development and capital investment.
The Finance Minister also mentioned that for the fiscal year 2026-27, Karnataka is slated to receive ₹63,000 crore solely from tax shares. She claimed that this amount exceeds the total funds received by the state during the entire UPA tenure by 76%.
Sitharaman emphasized that Prime Minister Modi believes in cooperative federalism. Referring to a recent meeting of the NITI Aayog Governing Council, she noted that all state chief ministers participated, and the Prime Minister clearly stated that the center and states will work together to achieve the goal of a ‘developed India.’
She concluded by stating that both the center and states play a shared role in India’s developmental journey.
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